Eni SpA is discussing the sale of a
portion of its 33 percent stake in Portuguese oil producer Galp
Energia SGPS (GALP) SA to Angola’s Sonangol EP, a person with knowledge
of the matter said.

Eni won’t sell Angola’s state oil company all its holding,
valued at 3.7 billion euros ($4.8 billion) at today’s price,
because the Portuguese government doesn’t want the African
country to have too much control, the person said, declining to
be identified before a deal is reached. The remaining holding
may be sold to financial investors, he said.

Eni, Italy’s largest oil company, dropped a plan to sell
the stake to Petroleo Brasileiro SA (PETR4) last year. Chief Executive
Officer Paolo Scaroni said last month he’s ready to sell again
because the company doesn’t want to be a minority investor in
the long term. Galp’s most valuable assets are holdings in
Brazil’s largest oil fields.

Under Lisbon-based Galp’s shareholder agreement, Eni must
win permission for a sale from Amorim Energia, a 33 percent
shareholder controlled by billionaire Americo Amorim and partly
owned by Sonangol, and state-owned Portuguese lender Caixa Geral
de Depositos SA, which has 1 percent of the company. The
agreement is in force until March 2014.

An Eni spokeswoman declined to comment as did officials at
Galp and Caixa Geral. Nobody was available to comment on the
telephone for Amorim Energia, and an e-mailed request wasn’t
answered.

Scaroni said on an investor conference call last month that
the stake is worth at least 3.7 billion euros.

‘Discussing With Partners’

“We’re discussing with our partners at Galp and at the
right time we’ll comment about Eni SpA (ENI) selling its shares in
Galp,” Sonangol board member Batista Sumbe told reporters on
Feb. 24 “We’re in talks and it’s premature at the moment to
provide more information.”

Angola, a former Portuguese colony, became sub-Saharan
Africa’s second-largest producer after the development of
offshore oil fields over the last 10 years, giving Sonangol the
cash to make investments overseas.

Galp holds 90 percent of its 2.9 billion barrels of oil
reserves in Brazil and has a target to reach 300,000 barrels a
day of production, according to its website. The company has
330,000 barrels a day of refining capacity in Portugal.